Steep Price Tag For Natural Gas Effort On Shore

SNOW HILL — A switch from propane to natural gas will likely be taking place across parts of Worcester within the next five years. However, a representative of Eastern Shore Gas Co. (ESG) warned the County Commissioners that the change would be both expensive and complex.

“This is a multi-year, multi-million dollar project,” said Steve Ashcraft, the Vice President and General Manager of ESG.

Ashcraft explained that recent interest in natural gas and the fact that the resource is just now becoming available in the area via a pipeline in Millsboro, Del., has led his company to take the first steps towards a conversion. He said that ESG hopes to provide natural gas to a large percentage of the county by 2016.

“We’re projecting about five years,” said Ashcraft. “That’s our best estimate.”

The program would be completed in stages, with natural gas made available to some areas before others, the first of which would be North Ocean Pines. After that, the transfer will move south with Ashcraft stating his company’s goal was to convert 20 homes a day.

Eventually, ESG plans on covering the majority of its 11,500 customers and hopes to add others during the conversion process. For those who’ve avoided propane because of its expense, Ashcraft explained that natural gas would be much cheaper.

“The main difference is the cost,” he said.

But while natural gas costs only about half as much as propane, the massive overhaul to ESG’s infrastructure means that some of that expense will be transferred to customers, mitigating savings to a degree. Currently, ESG has 291 miles of mainline, portions of which will need to be altered to allow the flow of natural gas, which is much lighter than propane.

The most dramatic overhaul, though, will be at the household level.
“It’s going to take an army of contractors,” Ashcraft told the commissioners.

Each of those contractors would have to be hired individually by the owners of the homes they would be evaluating as opposed to having ESG hire a few contractors itself. Ashcraft explained that this was because of the ambitious scope of the project — inspecting almost 12,000 homes in five years simply could not be handled without a massive amount of manpower and coordination.

“We’re going to need everybody’s cooperation,” said Ashcraft.

Besides the cost of ESG’s own restructuring, which will find its way into customer bills, there are other potential out-of-pocket expenses for homeowners. Replacing house piping would likely be the most expensive issue and could wind up in the $2,000 range or more. Fortunately, the current piping in many homes will be able to safely make the switch from propane to natural gas.

It’s more likely that items such as fireplaces, furnaces and appliances will need to be replaced for those compatible with natural gas.

Water heaters especially, which could cost upwards of $2,500 by ESG estimates, will have a difficult time with the conversion, with nearly all models unable to be refitted from propane to natural gas.

ESG presented three typical scenarios to the commission. The best case most homeowners could hope for would be to pay only $205 for the conversion. A worst case scenario, however, could mean around $6,000 in fees to cover house piping, furnace conversion and a new water heater, among other expenses.

Ashcraft admitted that it was certainly daunting to think about, but held firm in his belief that those who made the switch to natural gas would see noticeable savings on their bill both immediately and in the long run.

For those who decide to stay with propane, ESG is working on having provisions in place to continue service to those households. Because the lines will be converted to natural gas, homes wishing to keep propane will need to have either aboveground or in-ground propane tanks installed.

Unfortunately, some areas have restrictions on how and where tanks can be placed, leaving that option a complicated one. For his part, Ashcraft is hoping the vast-majority of ESG customers make the switch to natural gas, as it’s a more efficient solution than worrying about propane tanks. Additionally, the more homes that convert to natural gas the wider the network of distribution for the costs of that switch, meaning the expense can be spread out amongst a larger customer base.

While the commissioners expressed interest in moving the process along, a question of ESG’s commitment to deliver natural gas was raised.

“The County Commissioners are being offered an alternative scenario,” County Attorney Sonny Bloxom informed Ashcraft.

Bloxom added that ESG could have competition in the natural gas field. The commission agreed and asked for a guarantee and a potential timetable. Ashcraft was open to the timetable but was unable to give an ironclad assurance about any part of the project. However, he did state that the conversion to natural gas would likely occur as planned.

“Anything is possible, but it’s highly unlikely that once the process starts we’re not going to follow through,” Ashcraft said.

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